Knight Capital's $440m trading loss 'caused by disused software'

Knight Capital, the US market maker, has blamed a computer trading error that
cost it $440m (£282m) on disused software that was accidentally reactivated
when a new program was installed, according to reports.

The error caused wild swings in the share prices of almost 150 companiesPhoto: AFP

“This software problem was an infrastructure problem,” chairman and chief executive Thomas Joyce, 57, said in an interview with Bloomberg earlier this month. “It was more of a networking problem as opposed to using quantitative tools to trade.”

Last week it was revealed that Knight will be rescued by Blackstone, rival market maker Getco, TD Ameritrade and Jefferies paying $400m for Knight preferred shares that are convertible into ordinary shares. The deal will hand the investors more than 70pc of the beleaguered business.

Mr Joyce insisted the deal was the “best solution” given the pressure the company was under to secure fresh funding. The New-Jersey based company, which is far from a household name in the US, handles more than $20bn of trading on the New York Stock Exchange each day as its technology matches buyers and sellers.